Noble Corp. (NE - option chain) shares are rising today after Standard & Poor's, a unit of McGraw-Hill (MHP), announced NE will be added to its S&P 500 Index after the close of trading on Friday, replacing QLogic (QLGC). Addition to this index means that all the funds that track the index will need to add NE to their holdings, which is usually a positive thing for the stock. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NE.
NE opened this morning at $37.83. So far today the stock has hit a low of $37.37 and a high of $38.35. As of 12:30, NE is trading at $38.30 up $2.37 (6.6%). The chart for NE looks bullish and S&P gives NE a positive 4 STARS (out of 5) buy ranking.
Diversified publisher McGraw-Hill Companies Inc. (MHP) is likely to face a challenging 2011.
McGraw-Hill's education segment will face an increasing sluggish textbook market, as public school systems -- particularly those in poorer U.S. school districts, K-12 -- continue to belt-tighten in every way possible, due to state and local budget cutbacks. Translation: use existing textbooks longer, and increase use of the used-book market.
Jefferies upgraded CME Group (CME) to Buy from Hold and has a $330 target on the stock. The firm believes increased regulatory concerns have created a buying opportunity and notes that CME Group's fundamentals are stable-to-improving.
Susquehanna upgraded Priceline.com (PCLN) to Positive from Neutral and has a $230 target on the stock. The firm believes Priceline.com likely outperformed expectations in Q4.
Citigroup upgraded AutoZone (AZO) to Buy from Hold citing an attractive valuation, favorable industry trends, and the potential for margin expansion. The firm raised its target price on shares to $188 from $176.
Genzyme (GENZ) was raised to Sell from Conviction Sell at Goldman.
Disney (DIS) was upgraded to Neutral from Underweight at JP Morgan.
Exxon Mobil (XOM) was upgraded at Collins Stewart to Buy from Hold.
Kaufman Bros. upgraded Amazon.com (AMZN) to buy from hold as it finds the risk/reward on shares attractive following the recent pullback and expects the company to report strong Q4 results. Kaufman maintains a $155 price target on the stock.
Baird upgraded DeVry (DV) to outperform from neutral and raised its target to $76 from $62. The firm said they have increased confidence in DeVry's ability to navigate through the ERP implementation.
Benchmark Co. upgraded McGraw-Hill (MHP) to buy from hold on expectations the company's momentum should continue throughout 2010 due to improving debt markets, increased IPO issuance and steady education funding. The firm raised its target price on shares to $42 from $32.
Best Buy (BBY) was upgraded to buy from neutral at Rochdale.
AK Steel (AKS) was upgraded to buy from neutral at Goldman.
Cooper Industries (CBE) was raised to buy from neutral at UBS.
The action hasn't really begun, and the signals emitted are open to various interpretations. Nonetheless, Facebook's new dual-class stock structure is hard to miss, as it would protect the influence of early entrants to the company -- either as investors or options-compensated employees in the event that the 350 million-strong social networking site brings ownership opportunities to the public.
Citigroup upgraded Reynolds American (RAI) to buy from hold to reflect its improved outlook for the company's market share and pricing. Citi also sees a greater chance of British American Tobacco (BTI) bidding for the rest of Reynolds American it doesn't already own. The firm raised its target price on Reynolds to $59 from $52.
Stephens upgraded Simmons First National (SFNC) to overweight from equal weight to reflect the company's balance sheet and potential for accretive FDIC-assisted acquisitions. The firm raised its target on shares to $32 from $29.
FBR Capital upgraded Astoria Financial (AF) to market perform from underperform on expectations the company's net charge-offs will peak in the fourth quarter, limiting downside risk. The firm raised its target on shares to $11 from $10.
First Solar (FSLR) was upgraded to buy from hold at Collins Stewart.
Brown-Forman (BF.B) was upgraded to neutral from underweight at JPMorgan.
Juniper (JNPR) was upgraded to conviction buy from buy at Goldman.
The McGraw-Hill Companies (NYSE: MHP), a distributor of business information and educational materials which counts Scholastic (NASDAQ: SCHL) as a related stock, issued third-quarter results earlier today. Sales contracted over 8%. Net income on a dollar basis dropped almost 14%. Earnings per diluted share decreased a very unlucky 13% to $1.07. At least expectations were taken out. Earnings.com indicates a beat of two pennies for per-share profit.
The declines are pretty understandable. When you think about McGraw-Hill, you understand fairly quickly that the company's business model is tied closely to the economy. Education markets must be tough given all the budget cuts happening in school systems across the country. Plus, spending by administrators is probably done these days very slowly and carefully.
Scholastic (NASDAQ: SCHL), the publisher of the Harry Potter books, issued its first-quarter numbers on Thursday. Although things do seem to be improving, I can't say I was wholly enchanted by the data.
Net sales from continuing operations rose 14%. Okay, that's a good start. Double-digit rises are always respectable. But then we get to the bottom line. Scholastic, which is a related business to McGraw-Hill (NYSE: MHP), lost 68 cents per share from continuing operations. Now, sure, the loss was considerably less severe than the year-ago black ink of $1.13 per share. But I always get nervous when I read about losses. Can't help it.
Just call it 'one win, one loss' with these two shorts, first recommended on May 13, 2009. McGraw-Hill Companies (NYSE: MHP). Hold Short, first recommended on May 13, 2009 at a price of $29.89. After flirting with the Buy/Stop Loss at $36, MHP has resumed the predicted path: down. Belt-tightening by states, school districts, and by other education institutions does not bode well for MHP's education publishing wing. Cover Short on a bounce off $20 or $15. Buy/Stop Loss if you were to sell shares in this company: $36.
Or you could just buy the company and have done with it. McGraw-Hill (NYSE: MHP) is exploring a sale of the beleaguered icon, but the magazine's huge operating losses could mean it will fetch just $1, according to some experts.
The reason? With annual losses estimated at anywhere from $10 million to $75 million, acquiring the business would cost huge sums of money for at least a few years -- even if a miraculous turnaround can be engineered. Time Inc., Forbes and Conde Nast are reportedly not seen as suitors.
Investor and trader Mishko Janusevich had a mantra that he used to repeat while outlining the top, new stock shorts that appeared that day, as determined by technical indicators.
He would stand next to the overhead projected stock chart at the front of the trading room and recite, "You see this stock? You see that it's dropped $8 in past two days? You think it can't drop any more? SELL THAT STOCK it's dropping more!!"
Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy/Stop Losses:
ING upgraded Roche (OTC: RHHBY) to Buy from Hold as it believes Roche will not pay more than $100/share for Genentech (NYSE: DNA) and that the Avastin adjuvant data due April 2009 provides significant upside potential.
Oppenheimer upgraded Motorola (NYSE: MOT) to Outperform from Perform on valuation as it believes sentiment is at an all-time low and the stock has limited downside. The firm set a $5 target on shares.
Morgan Stanley upgraded Comerica (NYSE: CMA) to Equal Weight from Underweight citing valuation that adequately reflects credit deterioration in its commercial-heavy loan portfolio and aggressive government action.
When I visited the offices of LinkedIn about six months ago, the place was frenetic with activity as the business networking site was in the midst of surging growth.
Investors wanted a piece of it, naturally, and indeed today LinkedIn announced a Series D funding of $22.7 million. The investors include a mix of VCs as well as strategics: Goldman Sachs (NYSE: GS), The McGraw-Hill Companies (NYSE: MHP), SAP Ventures (NYSE: SAP) and Bessemer Venture Partners.
The deal indicates that LinkedIn's growth prospects remain intact. After all, in the current tough economic environment, business networking is critical.
LinkedIn's investor roster also shows that the company is likely to expand into new categories. For example, with the support of SAP, LinkedIn can make inroads into on-demand enterprise computing.
Dan Nye, who is the CEO of LinkedIn, wrote this in his blog:
"I'd like to reiterate our commitment to creating the right partnerships to help us build a great service for over 30 million professionals on LinkedIn today - a number that's growing by leaps and bounds each month. This funding strengthens LinkedIn further, and will help us to continue creating additional services for professionals to connect and collaborate more effectively, around the world. Services that allow you to connect with the people you trust, build out a robust online professional profile and collaborate with members of your professional network on LinkedIn." Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.
The Wall Street Journal (subscription required) has obtained a draft version of the SEC's report on bond-rating firms and their role in the credit bubble, and some of the stuff is pretty scary.
In one e-mail, a staffer at Standard & Poor's, which is own by McGraw-Hill (NYSE: MHP) told another that "we rate every deal," and that "it could be structured by cows and we would rate it."
Another wrote that "rating agencies continue to create" an "even bigger monster -- the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters. ;O)"
Yes -- complete with the smiley face. If this seems reminiscent of disgraced analyst Henry Blodget's e-mails bashing stocks he was publicly pumping during the dot-com bubble, that's because it's exactly the same. The lesson here, once again, is this: e-mails ever really get deleted permanently and, if you're being shady or doing something unethical, make a phone call, talk with the person in a dark alley, or send them a letter that they can promptly discard. Don't send an e-mail!
Of course, S&P's investment-grade ratings on CDOs stuffed with dodgy loans turned out to be wildly optimistic, and the house of cards has done more than falter -- it's brought down Bear Stearns and wreaked havoc on the economy.
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Noble Corp. (NE - option chain) shares are rising today after Standard & Poor's, a unit of McGraw-Hill (MHP), announced NE will be added to its S&P 500 Index after the close of trading on Friday, replacing QLogic (QLGC). Addition to this index means that all the funds that track the index will need to add NE to their holdings, which is usually a positive thing for the stock. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NE.
Diversified publisher McGraw-Hill Companies Inc. (
Look, 2009 was a "flush" year. Market rallies were constrained by the low baseline set at the end of 2008, 
Just call it 'one win, one loss' with these two shorts, first recommended on May 13, 2009.
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When I visited the offices of 
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. He is also the founder of 
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